AUSTRALIA’S LARGEST manufacturer and exporter of gearboxes and attachments for the earthmoving machinery industry, Brisbane-based Digga Australia Pty Ltd, has been successful in its appeal to overturn a decision ordering it to pay $80,000 to a competitor for alleged copyright infringement.
The appeal, which was heard by the Full Federal Court, is one of only two significant decisions in the past year regarding copyright/design overlap provisions and will also see Digga receive most of its legal costs, which exceed $500,000.
According to Hopgood Ganim Lawyers Special Counsel Paul Norris, who acted on behalf of Digga, the decision provides important clarification on the issue of whether functional designs should be protected by copyright.
Norris believes the decision removes any doubt as to whether functional designs are covered by the copyright/design overlap provisions of the Copyright Act.
“This decision provides clarity in an area of law that has been under intense criticism by the judiciary, lawyers and academics,” Norris said.
Norm Engineering Pty Ltd issued the proceedings against Digga, alleging that Digga had infringed Norm’s copyright in its two-dimensional drawings for the Norm “4-in-1 bucket” — an attachment for bobcats.
Digga admitted that its competitor’s product was a source of ideas for its design of an equivalent bucket. At trial, it was found that Digga had reverse-engineered a Norm 4-in-1 bucket and its creation of drawings for a particular component of the product was an infringement of Norm’s copyright.
For this Digga was ordered to pay damages of $80,000.
Norris attributes the original judgment to confusion between moral intellectual property rights, and the actual rights afforded to functional designs put to commercial use.
“He [Justice Greenwood] looked at each of those drawings and I think the judge at first instance was of the view that Digga had done something wrong by copying a bucket,” said Norris.
Digga never denied that it had sought to recreate the Norm bucket, and openly acknowledged to the court that they had purchased a Norm bucket and, from looking at that bucket, produced drawings and subsequently produced their own version of the 4-in-1 bucket.
In general terms, the decision means that once Norm produced their three-dimensional bucket from the two-dimensional original drawings and put it on the commercial market; they lost the right to copyright protection from others reproducing the product.
The timing of the case had particular significance, straddling the line between pre-existing legislation and the change to the law changed 17 June 2004. According to Norris, this is the first time that the Courts have had to review and interpret the operation of new provisions that came into force on that date.
These provisions seek to remove copyright protection for artistic works that are applied to products to encourage authors to protect their products under the Designs Act.
The reality for manufacturers could be a harsh one, Norris explained. “This act now precludes dual [copyright and design] protection, but I think it goes further, in that there are a lot of things that fall between the cracks and can neither be protected as designs — for instance if they’re highly functional — but neither can they be protected under the Copyright Act, because they’re forward in those copyright design overlap provision,” he said.
“So I think the message now is quite clear to those people who are in the business of manufacturing items from drawings. That once you’ve manufactured it, it’s open slather for your competitors to copy it.”